Covad Acquires GoBeam

SAN JOSE, Calif. -- Covad Communications Group, Inc. (OTCBB: COVD), a leading national broadband service provider of high-speed Internet and network access, today announced it has signed an agreement to acquire GoBeam Inc., a privately-owned provider of Voice over Internet Protocol (VoIP) services.

Covad will acquire GoBeam, including its assets and intellectual property in a transaction valued at $48 million that is expected to close in May of this year, subject to customary closing conditions. GoBeam’s stockholders will receive Covad shares in exchange for their GoBeam shares. GoBeam, which is based is Pleasanton, California, currently has more than 13,000 VoIP stations (telephones) serving business customers throughout California and in the Chicago, Illinois area.

VoIP represents a dramatic transformation in telecommunications that leverages the power of the Internet to enable next generation communications capabilities. It uses a broadband Internet connection to carry local and long distance voice calls instead of the public switched telephone network. According to a report from research firm Stratecast Partners, by 2007 the U.S. VoIP market is forecast to grow to more than five million subscribers, a five-fold increase over 2002 levels. The Internet Protocol-PBX market, which has just under 100,000 lines today, is expected to grow to more than 1.7 million lines by 2007, according to Forrester Research.

“Our acquisition of GoBeam not only accelerates Covad’s entry into the growing VoIP market, but it also is a major step in transforming Covad from a broadband company into an integrated voice and data communications provider,” said Charles Hoffman, Covad president and chief executive officer. “By combining Covad’s nationwide broadband network with GoBeam’s market-leading VoIP services we expect to greatly accelerate the national availability of VoIP and communications services bundles eventually reaching more than 100 of the top Metropolitan Statistical Areas (MSA) in 35 states.”

“We welcome the opportunity to partner with Covad,” said GoBeam CEO Bill Jarvis. “The combination of GoBeam’s managed business communication applications with Covad’s nationwide broadband network and operating systems will enable us to provide end-to-end business communications solutions to customers across the country

Covad Communications Inc.